Under The Hood: Kevin from Karst

Before we dive in, here's a short overview of what Karst is all about: 

Karst crafts beautiful tools to be used every day. Their iconic notebook is made from sustainably recycled stone and rebuilt from first principles to be better than wood-pulp paper: more durable, more sustainable, and infinitely smoother to write, scribble, doodle or draw on. In addition to the environmental benefits of stone paper, Karst is B-Corp Certified, has partnered with the One Tree Planted Foundation and is 100% carbon neutral.

Hey Kevin! Let’s start at the beginning: What is Karst and how did it come to be? 

It's a pretty long story. I've got a fairly unique story. Well... I seem to think it's unique, but actually when I talk to a lot of other business owners, we all kind of went through similar paths. 

I initially wanted to play professional football/soccer. That was where I was going, and was headed to Europe to go down that path. And then, that wasn't going to happen. So I went to university and studied Medical Science, and that turned into medical device consulting. I did that for about 3 years and thankfully I was pretty good at it. However, I wasn’t happy, I wasn’t fulfilled. I was missing this huge drive to move forward everyday, get out of bed and be excited about the work I was doing. 

So that got me to think about starting something of my own. So having that seed in my mind really helped because when opportunities presented themselves, I jumped straight onto them and didn't even second guess them. 

I went through a few business opportunities, just to learn the ropes before I got to Karst. At the time, when things don't work out, you think it's quite tough. But I’m thankful that some things didn't go as planned because it allowed me to train myself up to be ready for when it really mattered. And that's where Karst is now. 

When you were iterating on these other business ideas, did you quit your day job and start working full-time on those other side projects?

I was fortunate enough that I did have some spare time during my other job. I would actually go to hospitals and help surgeons use equipment. On my downtime, I would absorb as much knowledge as I could in business. When working on those side businesses, I was making a little bit of money and it came to a point where I thought: “If I leave my job, and earn minimum wage doing whatever I'm doing, it's probably still going to be worth it”. I would rather earn no money doing what I loved than earning a lot more money with something I wasn't enjoying. 

I sacrificed a lot. I moved out of my apartment, left my girlfriend at the time, moved back to my parents' house in another state, stayed there for about 3 months until I got everything sorted, until I pulled the trigger. And so that was kind of the go time.

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So, Karst was the ultimate business that became enough of a revenue generator for you to say, "Yup, this is it. I'm going full-time on it”? 

Not quite, I started a previous business. It was about 2014. It was when Kickstarter was just starting to get a lot of traction. And I launched a watch company which did well. That was my very first e-commerce transaction experience where I just put something out there into the world, designed something, manufactured it, and people were paying for it. I’ll never forget the very first time someone bought something. I know it's a cliche to say, but that first transaction which was like over 200 bucks changed me. That first Kickstarter generated about $50,000 in the first 20 or so days. That was the first instigator, and then in the last two months of my work I was already starting to develop the foundations of Karst: The materials, and the science behind it.

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That's fascinating. Was paper and stationary, a passion of yours since the beginning? 

I don't think we have an obsession for “general stationary”. That's not really how we think of Karst. And we still don't think about that when we think of Karst. We've got so much more products that we're producing outside of stationary. I also wanted to be part of a business that made an impact to the world
When it all started, I was obsessive about the consumer mindset and designing products that people love. I loved the idea of making really beautiful products. That's what I really loved. So when I came across the stone paper material, I saw the massive hole in this paper industry; where sustainability meets design. 

Today it's a bit of an oversaturated market in the sense that everyone claims to be sustainable, but in 2016 you didn't really have that. So that's how I initially saw the opportunity. It came about at the right time which is why I keep saying this to other business owners: The timing, and the market trends are so important. 

So take me back to 2016 when you officially launched - How did it go? 

Once I'd done some research with materials and understood the science behind it, we had to turn that into beautiful products. That was quite painful. It wasn't so simple as saying, "Can you just make this into notebooks or stationary?" There were different glues and bindings and printing materials, and printing methods that needed to be used in order to manufacture this. 

After that I spent quite a lot of time thinking about how to tell the story. That's the most important thing, right? You can’t just release a product, put it on a website and say, "Oh, here's a notebook but that's got some different materials." We really need to have a way of telling that story, in the most authentic way possible.

I was over in Singapore working on the foundations of Karst  at the time, living with Jon, my now Co-Founder, who was working on his business. And that's where he comes into the story. And as I was producing the concepts and the ideas behind the brand, Jon was there behind the scenes, understanding what was going on. 

Once I had the site live (again timing was crucial - this was 2016 and the glory days of Facebook Ads). We were doing well over 1000 orders under a $2 CAC, which is unheard of right?.  That's never going to happen ever again.  So we quickly got to strong lookalike audiences, and then things began snowballing and getting bigger and bigger. 

Before we knew it, we had more products, more staff, and things can get a bit out of control.

Were you ready for the rapid growth? That must've been tough to handle

It was hard. And in the previous business I ran, I learned that the most difficult thing by far was operations. So from the get-go, I made sure we had two warehouses / 3PL partners: One in the U.S and one in Sydney - ready to go. That’s how I prevented any of those issues happening. It maybe cost us a little bit more money up front to have that outlet, but it was worth it.

How does that work for the U.S?  Do you ship a box full of goods to the third party logistics company in the U.S and whenever an order is processed, they ship it and do everything for you? 

Yeah, that's pretty much it. Though at the time it was a little bit more complex: We had to convince this company in the U.S that, "Hey, I'm brand new, but I promise you, we're going to get sales, it's going to be worth your time.". That was always a bit hard as a new brand, because as a 3PL you’ve got a lot of work to do: They've got to do your transports, your inbounds, your stocking, train the staff how to pack your product. We were lucky because books are probably one of the easiest things to pack. But that's basically how it worked. I sent a pallet of stock to the U.S and the pallet here in Sydney and clicked “launch”. I think the video is one of the things that really helped us with that customer acquisition cost. 

Did you start in Australia and expand to the US? 

Actually the opposite of that. I understood it was easier to go straight to the U.S market than it was to start in the Australian market. I'd come from that Kickstarter phase and I understood the mindset of U.S consumers. So it was much easier. I remember releasing everything the same for both markets and the U.S just grew.. We got a lot of press in the U.S so that helped too. And we also secured key partnerships with businesses like WeWork and TED Talks which helped get the brand on the map. 

Now digging into the product roadmap: Did you start with a hero product and then carefully expand on there? 

That's still a difficult question even today. We started originally with a planner.  That planner then became a core range of notebooks and journals, and stationery items with different types of page layouts. We had 20 different colors and beginning of last year, we had just over 100 SKUs. That's a lot for a relatively small product line of goods. 

So we've now decided to cut back on SKU count, while increasing product lines. So going more vertical than horizontal. We're looking more towards workplace products which is really where I'm excited to go. Everything on your workspace: We should own that space. 

I wanted to get your perspective on the website - How has that evolved over the years? Today I see something extremely polished - Was it that way from day one? 

For the first 2-3 years, we probably had a standard Shopify template. I just played with that, and did it all myself. I just played with that until I had a decent enough website that I was proud of and was happy. A lot of people were asking where we got that done and it was just a basic Shopify template. But it eventually got to a stage where we were getting a lot of competitors completely duplicating our website.

At that point I was like, “no, this is no good. We need to do something outside the box here”. 

So we invested in a new website, working with an agency here in Australia and we got them to help us redesign, from the ground up the whole website experience. And funny you ask, because we go live on next Monday (**Monday April 26th 2021**). The current one was made for a single product with lots of SKUs and it doesn't fit our new direction. 

We've got some really cool stuff coming that I'm excited about. We're using a lot of 3D rendered art. So we're partnering with a design team to do a lot of 3D animation. We're finding that a lot 3D rendered art is coming out for consumer goods.

Let’s chat about the team structure? How have you approached hiring? 

This is one of the most challenging parts for any business owner. Most entrepreneurs think that they can do it themselves. They think "Oh, It's my idea. I can do it all." And you know that's not going to happen. You're never going to do the best things by yourself. I always knew that we had to get the best people to help out with certain parts of the business. And that's how I think about it, but I've been very strict with who I let into this little space. 

Jon (Karst co-founder) came in and we had known each other for 20 years - We've been friends since we were young, and we've kept in touch ever since. So that was almost inevitable.

You've got to trust people to come into your business and give them the opportunity to shine. Everyone's got things that they're really good at. And when someone new comes to the team, that's the first thing I focus on: "I want to find out what you are really good at. Even if they don't know what that is”. Everyone in our team's got their thing that they're great at and that's how we get the best results.

Do you see Karst expanding globally - Or are you still prioritising certain geographies?

Our fastest growing market, by far at the moment, is Europe. That's a sweet spot for us in terms of the brand. The key goals for us this year is all about distribution partners. So there's a lot of countries out there who aren't predominantly English speaking, and it's very hard to penetrate those markets with a product. So that's where we go and get distributors. We're about to close ones in France and Italy, Germany, Spain, hopefully, and then, the U.K as well. 

Will you still be selling D2C or you'll be selling it via retail partners?

I can talk about that in terms of the structure. So the first 2 years of Karst -  we were purely D2C. And D2C is obviously a very difficult grind. There are so many intricacies of D2C. People from the outside think: “Oh, you just make a product, you put on a website and then people are going to buy it. And then you get some money, and you win”. But there are so many moving parts. There's so many adjustments you've got to think about when it comes to margins. It's a difficult process. So when we started to notice the customer acquisition costs creep up, I was like, “Okay we need to get to wholesale”.

Thankfully the pandemic slowed down the retail market bit for us to buy time to build up the wholesale channel. E-commerce is still the umbrella of the brand. We use that to communicate everything about the brand and about the product. We then sell wholesale into stores and distributors, and then we also cover B2B corporates like Google, Porsche, Samsung and Facebook. That's been really great - a great revenue driver is B2B corporate gifting. It's a massive industry. 

So, D2C is still the bread and butter of what we do and who we are, but we're very fortunate enough to focus on these other channels  and have a product that is flexible enough to work for both channels.

Any last words of advice? 

I could sit here and talk all day, to be honest. But like I mentioned  before - the team is vital. You need really great people to be able to create great products and great businesses. You're not going to do it by yourself. That is something that I've learnt  more than anything. And that's something I'm learning now: How to deal with bigger teams, and be the most efficient business owner I can be. I like to get down into the details and I love creating products with detail. Sometimes I get way too deep and I forget that I spent four hours on something when I should be thinking about the team. So, yeah - that’s my challenge.